by M. Sigmund Shapiro
October 29, 2001

There should be no doubt in anyone’s mind that the events of September 11, 2001 will forever change transportation patterns, and have a massive effect on cargo logistics. National or Homeland or Internal Security will be the name of the game.

The new anti-terrorism law, just signed by the President will allow the government wide authority to involve itself in personal and business affairs.

We’ve already seen highly restrictive rules for air cargo, especially when shipped on passenger flights. And we’ve seen distorted interpretations by FAA personnel ruling that unknown shippers cannot ship on air freighters operated by airlines that also have passenger service. The whole known shipper / unknown shipper regulations themselves result in anomalies. They require an indirect air carrier (freight forwarder) to visit, say Dupont if the forwarder had never handled a shipment for that firm. Surely Dupont is not an unknown shipper. A national list of known shippers on the AES site would be a more effective tool.

Changes in ocean carriage procedures can be even more disruptive. The legislation before the Congress to eliminate or drastically restrict in bond movement of cargo could cause a dislocation of port practices, especially at inland ports. The bill would require additional information to be filed at the first port of arrival, to enable Customs to screen shipper, point of origin and merchandise description data. Importers seem to agree that some data should be required but, how much? And the delays that will arise on landbridge movements will wreak havoc with inventories. Delivery schedules will definitely be extended. Just In Time inventory control is going to be much more difficult to achieve. Importers and exporters will demand more from their broker/forwarder.

The logistics industry, especially the broker/ forwarder segment will need to enhance its tracking capabilities to meet the changes if it wants to maintain its position as the principal real time information source for shippers and importers.

And the clients of these firms will necessarily have to pay the bill for the massive upgrades needed. No longer will such services be used as loss leaders to capture the client.

All in all, international trade is going to be a lot more expensive.